Toyota reported record profits for the past year Wednesday, citing cost reductions and currency fluctuations, but forecast its first profit drop in five years for the current period.

    Net income reached 2.31 trillion yen (21 billion dollars) in the year to March 31, the Japanese carmaker said, up 6.4 per cent from 2.17 trillion yen the previous year.

    Operating income was up to 2.75 trillion yen from 2.85 trillion. "Major factors contributing to the increase included cost reduction efforts of 390.0 billion yen and currency fluctuations of 160.0 billion yen," it said. 

    Sales by unit fell slightly, down 290,536 to 8,681,328 worldwide. "The positive factors such as cost reduction efforts and favorable foreign exchange rates more than offset the negative factors such as decreased vehicle sales and increased expenses, particularly labor costs and R&D expenses," executive vice president Takahiko Ijichi was quoted as saying. 

    But the company forecast a drop in profits for the first time in five years for the year that started in April, down 35 per cent to 1.5 trillion yen, well lower than the 2.19 trillion yen anticipated in a poll by financial news agency Bloomberg.

    The statement further warned that the forecast "does not include the effects of suspension of operations on vehicle assembly lines in Japan resulting from the Kumamoto Earthquake" in April.

    The forecast was based on an exchange rate of 105 yen to the dollar, and 120 yen to the euro, it said.